Club Coffee sues pod coffee company Keurig, Report

An Ontario coffee roaster and grinder is suing U.S. coffee goliath Keurig for anti-competitive behaviour, claiming it is keeping the price of single-serve coffee pods artificially high for consumers.

Club Coffee’s $600-million lawsuit against coffee supplier and equipment maker Keurig Green Mountain alleges the U.S. chain is flouting the rules to maintain a near monopoly and keep single-serve coffee prices artificially high.

Since 2012, the Ontario roaster and grinder has manufactured a line of disposable soft-bottom coffee pods that are compatible with Keurig machines. The company alleges that Vermont-headquartered Keurig has taken unfair measures to force consumers to use only its hard plastic K-Cup packs in their machines.

In particular, the statement of claim filed Tuesday in Ontario Superior Court, singled out a new line of Keurig 2.0 machines with “lock-out” technology. The machines only recognize K-Cup packs with specially coded lids.

The lockout technology has been utilized to “confuse consumers and eliminate competitors from the market,” resulting in reduced consumer choice and higher shelf prices for the K-Cup packs, says the lawsuit.
In North America, Keurig coffee pods currently have over 90 per cent market share of the fast-growing single-serve coffee market.

“We knew consumers would be staring at a virtual Keurig monopoly unless we took action,” said Club Coffee CEO John Pigott in a statement. “Keurig has used claims of proprietary technology to coerce retailers and other customers into exclusive arrangements to sell only Keurig-blessed products.
“The situation is simple here. Keurig wants less competition, less consumer choice, less room for innovation and to keep prices high for consumers….Keurig should welcome healthy competition and the innovation it creates instead of trying to block us.”

Keurig, which recently announced a nine per cent rise in price to the Keurig brand K-Cups, said the company hadn’t seen the complaint and so couldn’t comment on it.

In business since 1906, Club Coffee recently announced plans to bring to market a fully compostable coffee pod that uses bio resins instead of plastics.

The lawsuit accuses Keurig of spreading “baseless and disparaging lies about competitors’ packs in order to mislead consumers and coerce third parties into exclusive agreements ….false statements that Club’s Soft Packs are defective, brew coffee of poor quality, cause damage to Keurig brewers and void the warranty on Keurig brewers.”

Consequently, Club Coffee has “suffered losses and seen its business interests damaged, including …loss of sales, goodwill, and current and prospective customers,” says the claim.

Agencies/Canadajournal